New Delhi | Jagran Business Desk: Day after the central government extended the coronavirus lockdown till May 31, food delivery platform Swiggy announced that it has decided to lay off 1,100 of its employees spanning across grades and functions in the cities and head office over the next few days.

In a statement, the food delivery company said that the coronavirus crisis continues to hurts its business, following which it has decided to take this "unfortunate downsizing decision".

This comes days after Swiggy's closest rival Zomato announced to lay off nearly 13 per cent of its workforce because of the coronavirus crisis. 

Swiggy co-founder and CEO Sriharsha Majety informed that all the impacted employees will receive at least three months of salary, irrespective of their notice period or tenure.

"For every year they have spent with us, we will be offering an extra month of ex-gratia in addition to their notice period pay, working out to between 3-8 months of salary depending on the tenure," said Majety, as quoted by news agency IANS.

The company further said that if someone's notice period is three months and they've spent five years with the company, they will get eight months of salary, adding that it will inform those being laid off in one-to-one video calls.

Swiggy said it is also going to scale down or shut down adjacent businesses that are either going to be highly volatile or will not be highly relevant for the next 18 months.

"The biggest impact here is on the Cloud kitchens business, with many unknowns about volumes through the year. Since the onset of Covid-19, we have already begun the process of shutting down our kitchen facilities temporarily or permanently, depending on their outlook and profitability profile," IANS quoted Majety as saying.

"We are already operating at significantly lower levels on our staffing and physical infra than our earlier footprint, and will continue to optimize before we get more clarity on order volumes for food delivery," he added.

Majety said he needs to build a much leaner organisation and reduce costs to be able to withstand any further risks from the uncertainty.

"We will have to reduce our expenses such that we can achieve profitability with a smaller order volume than hitherto planned. This will be done keeping in mind already identified efficiencies, along with additional reductions in teams and initiatives that will have lower activity because of Covid," he added. 

(With IANS inputs)

Posted By: Aalok Sensharma